Business intelligence is a term used to describe just about any type of information delivery. It has been co-opted by vendors and consultants selling everything from basic operational reporting to highly specialized analytic applications. This article will examine various forms of information delivery and clarify a definition of business intelligence (BI) and its usage. The first part of the article will propose a definition and role for BI, the second will forward suggestions about distinguishing the different forms and uses of BI technologies.

From Data to Information, the First Leap

The context for any discussion of BI is very important. Establishing this context, however, is very difficult because users, vendors and consultants approach BI from distinct perspectives. Let’s try to agree on some basic definitions. These may be redundant reading if you have viewed my presentations on the online trade show on but are important groundwork. (See Dan’s new presentation: Just-in-Time BI Delivery, beginning October 15 at .)

Data: Facts about events. This is the seminal definition provided by the Harvard Business Press publication Working Knowledge. It is meant to convey some basic ideas about the nature of data in its "raw" or source form. We often speak of "data points" when discussing specific point in time items of interest. This corresponds well with the Harvard definition. Points of data are indicative of actions taken at specific moments in time. Data can be thought of then, as "content," as in the "contents of a transaction or event. Content items in a typical event (transaction) might include:

  • Amount
  • Date
  • Purchaser
  • Ship-to address
  • Items and quantities

Information: Facts and artifacts woven together to produce meaning. This is a summary of work presented in Working Knowledge and other publications. The point of this definition is the distinction between data and information. Information requires integration. Integration produces information by weaving together critical facts and artifacts. Artifacts are the contextual elements of business activities. They provide a basis for understanding relationships and trends over time. Contextual elements of an event (transaction) might include:

  • Purchaser address
  • Purchaser credit history
  • Units of measure (dollars, ounces, cartons)
  • Referral or third-party specifics
  • Other relationship specifics

Intelligence, Knowledge and People

Intelligence: Not so fast. Intelligence, knowledge and other high- level forms of information may not be so easily defined. The reason is that intelligence or knowledge is really a combination of the digital domain and the analog domain. In other words, intelligence and knowledge include digital and other forms of information but exist exclusively in people and groups. Intelligence is really used in a limited and specific way by software vendors. Think of it the way you might think of intelligence agencies that gather and analyze "intelligence" about the behavior of others. The notion here is that that specific form of intelligence can be housed in computers and expressed in printed or electronic form, with no human interpretation or presentation required by the viewer. So, the role of people in the creation, housing, sharing and usage of intelligence is necessary to its very existence.

Business Intelligence: Should be viewed as an extension of the integrated information decision-makers require to produce business value (money). These decision-makers exist in all levels of an organization and require very different information flows to support their decisions. The decision-making process relies upon the judgment of these individuals and the information they use. BI is specifically formulated to support business decisions and actions. Information and human judgment are both necessary conditions for the existence of BI, neither is a sufficient condition.

The Roles of People and Technology in Business Intelligence

Consumers and Providers: People’s roles in the creation and usage of intelligence vary based upon the type and use of the intelligence. Business intelligence is a general form of actionable information and judgment criteria, not all of which is embodied outside of the person involved.

The application of judgment criteria requires individual or group values and priorities. Judgments are the result of a process that includes information as an input, values and priorities as a dependency for processing, and a decision or action as a result. This is the basic construct for decision making. We know that the BI industry segment has developed from what was first called decision support (DSS). So, now that we have traced the roots of BI, what is appropriate to expect from this technology and what must be done to use it successfully. This is the focus for the second part of this article.

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